Does the end of a financial year fill you with dread? For many business owners the end of financial year tax season is very stressful. The key to a better EOFY is starting your preparation early – don’t wait until July 1 to start looking at your books!
To help you prepare, we have put together a list of five things you should do now to get organised. Make the tax process less stressful, stay on top of your tax obligations, avoid penalties, and maybe even reduce your tax bill. Let’s get started on EOFY prep.
1. Get your BAS and GST reporting up to date
If you’ve fallen behind in your reporting to the ATO, now is the time to catch up so you avoid penalties. Getting your BAS and GST lodged will help you get your financial records up to date as well. So, preparations for end of financial year tax reporting will be easier and possibly save you money on accounting fees.
If you’re struggling with your BAS and GST reporting, a registered BAS agent (like Dream Admin) can help get it sorted. And they can work with the ATO to agree on a payment plan if you have tax debt to repay.
2. Pay your employee superannuation contributions
You can’t claim superannuation as a business tax deduction if it hasn’t been paid yet – even if it applies to the current financial year. So, it is worthwhile getting on top of your super payments to maximise your tax deductions.
And make sure you are on top of your payroll processing. Use this time before June 30 to tidy up any issues with your payroll. Check all your employee details are current and they have been paid correctly.
3. Get your books in order
Work with your bookkeeper to get your financial records in good shape. Make sure all expenses and income are recorded and correctly categorised. Accounting software makes this job a lot easier. But it is also a good idea to double check where payments in and out are being assigned.
Still using a spreadsheet for tracking income and expenses? Now is a good time to consider shifting to accounting software or outsourcing your bookkeeping to a professional. It might not take all the pain away for this tax season, but will set you up for a less stressful FY2024.
Accurate and complete financial records will save you time, money and stress – not just at end of financial year but all year round.
4. Book in a tax planning meeting with your accountant
It is a good idea to speak with your accountant BEFORE end of financial year. Having a pre-tax check in might identify opportunities to improve your tax outcome. It might also identify gaps in your reporting requirements and make sure you are crossing all your T’s and dotting your I’s.
Giving your accountant advance notice of where your business is sitting for the financial year will put them in a better position to plan your tax return. And deliver the best outcome for your business.
Consider having a joint meeting between you, your bookkeeper and your accountant.
At Dream Admin, we partner with an in-house accountant, Katie from Price Perspective. This delivers benefits for our clients through cost savings and an easier, smoother tax time experience. But we work collaboratively with all our client’s accountants to produce the best outcomes.
5. Collect all your supporting evidence
Accounting software links to your business bank accounts to record and reconcile transactions. But you still need to provide evidence to support your reported expenses and income. Your bank statements are not enough evidence for the ATO if you were to get audited.
Make sure you have all your invoices, receipts and other financial records stored together in an easily accessible place. Most accounting software, along with third party apps, allow you to scan/capture physical documents. Then you can attach them to the financial record in the system, which can save a lot of time and effort come tax time.
Now is the time to start getting ready for your EOFY process. Doing these five things will take away a lot of the stress associated with EOFY tax reporting. And they could also deliver a better tax result for your business.
If you need help with your bookkeeping, this is our jam! We love helping small business owners get their financial records under control so they can worry less and make better business decisions. If you want to have a chat about options for outsourcing your bookkeeping, book in for a free, no obligation consultation with Dream Admin Managing Director Tennille Skelly. Contact us at [email protected] or give us a call on 4821 2559.
